How Do We Recover From This War?

Answering the Kennedys’ Call

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Equitable Growth

Robert Hormat, a former ambassador and national security advisor in three administrations, has warned in a recent article that we are already fighting a Third World War.

“This is not a confrontation of countries with nuclear and other advanced weapons, but it does involve massive numbers of countries throughout the world in a very different way. They are not fighting one another but, instead, this Third World War is against a small, unseen virus that threatens all nations — regardless of the nature of their governments or their political philosophies — and millions of their people.”

Then why call it a war? The novel coronavirus can only be defeated if we create a worldwide alliance to heal the real enemy—massive poverty levels that could result once the virus is conquered, which will be once science perfects a vaccine.

Whereas worries are growing that COVID-19 will worsen the record income and wealth inequality that already exists in America. So much so, that some studies are predicting a coming poverty epoch rather than episode, one that lasts decades instead of years. We could then have an actual World War III, as the world plunges into deeper recessions.

Studies have shown what happens when nations compete for what they see as scarce resources in a zero-sum, winner-take-all game, rather than the win-win sharing in alliances that have kept us out of major wars since World War II.

“For seven decades after World War II, the notion that global trade enhances security and prosperity prevailed across major economies,” said a recent Sunday NYTimes Op-ed by Peter Goodman, et. al. ”But in many countries—especially the United States—a stark failure by governments to equitably distribute the bounty has undermined faith in trade, giving way to a protectionist mentality in which goods and resources are viewed as zero-sum.”

And that is what we are seeing now, the ascendancy of authoritarian regimes that foment fear and breed chaos to maintain power in countries such as Hungary, where the Prime Minister has taken this opportunity to disband parliament and rule by decree.

Columbia’s Center on Poverty and Social Policy predicts poverty levels will worsen even with a normal recovery.

Our projections demonstrate that if unemployment rates rise to 30 percent, the poverty rate in the United States could increase to 18.9 percent from 15.1 percent (an increase of 21 million people) and would mark the highest recorded rate of poverty since at least 1967. Even if unemployment rates return to normal after the summer, our projections suggest poverty rates that rival those of the Great Recession.”

If we don’t confront this possibility, we might lose the opportunity to create an economic and social response to the pandemic that also lessens the occurrence of future pandemics, and the economic damages they will inevitably cause.

There will be incredible suffering at the bottom of the economic ladder, if we don’t implement policies that lessen the inequality. Without a more equitable distribution of our wealth, we remain a country divided with record suicide, alcohol and drug abuse rates of white, working class males in rust belt America that Princeton economists Anne Case and Angus Deaton, a 2015 Nobel Prize recipient, have documented in Deaths of Despair and the Future of Capitalismtheir best-seller of that title.

Richard Wilkinson and Kate Pickett, sociologists and epidemiologists, in the Spirit Level and other books, have been sounding the need for greater equality.

“More equal societies are marked by strong community life, high levels of trust, a greater willingness to help others and low levels of violence,” they said recently in The Guardian. “As inequality rises, all this goes into reverse. Community life atrophies, people cease to trust each other, and homicide rates are higher.”

The urgency is there in the face of a another looming Great Recession or Depression. The U.S. congress has already agreed to three recovery programs, such as the $2 trillion CARES Act to distribute income directly to individuals, as well as grants and loans to large and small businesses.

It won’t be easy. As Keynesian economist John Kenneth Galbraith once said about the wealth-holders, “…the privileged feel also that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.”

Americans are really staring at the possibility of a second Great Depression.  The first lasted 1o years from 1929-39 and the outbreak of World War II. The unemployment rate is expected to soar, as more than 20 million members of our 150 million work force will be out of work for a prolonged time due to COVID-19.

It will be the communities and countries that know how to care and share their wealth, rather than isolate and compete with each other for resources and knowledge, that will create a more peaceful future.

Harlan Green © 2020

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

About populareconomicsblog

Harlan Green is editor/publisher of PopularEconomics.com, and content provider of 3 weekly columns to various blogs--Popular Economics Weekly and The Huffington Post
This entry was posted in Economy, Politics, Weekly Financial News and tagged . Bookmark the permalink.

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